12 November 2018 Weekly Analysis
GCMAsia Weekly Report: November 12 – 16
Market Review (Forex): November 5 – November 9
US Dollar
The US dollar appreciated throughout the week supported by positive data and hawkish sentiment amid Fed’s Interest Rate Statement. The dollar index underwent short-term technical correction, closing Friday’s market lower at 96.68 after a large buy-off due to positive US PPI data.
Earlier last week, dollar gained the upper hand against six major currencies with a higher than expected reading of ISM Non-Manufacturing PMI data at 60.3. While investors were still digesting positive sentiment amid last NFP data, the PMI data further boosted demand for the dollar. Later that week, US FOMC Statement and Fed Interest Rate Decision further gains for bull as US Central Bank said that the economic growth was in pace and job sector was improving. As interest rates are currently locked at 2.25% and Friday’s PPI data proves improving inflation outlook, the Fed is expected to continue its 4th rate hike this year on December. Limiting dollar gains last week was the mid-term election results where the Democrats won the House while Republicans retaining the Senate worries investors that President Donald Trump will be having a hard time to introduce new legislation.
Overall, the dollar continues its bullish momentum while sentiment remains strong towards the dollar. Investors will be paying attention to this week’s CPI data while dollar faces short-term technical correction, retracing from higher levels.
USD/JPY
USDJPY surged to a new high since 30th September, but closing the market slightly slower at 113.70 on Friday. The Japanese Yen was largely sold throughout the week when investors risk appetite increases, causing investors to shift from safe-haven market to risky asset.
EUR/USD
EURUSD fell to its 31th October low while closing the market at 1.1335 during last week Friday session. Sentiment towards the euro market remained cloudy as Italy is still unable propose a better budget plan.
GBP/USD
GBPUSD plunged throughout the week, closing last Friday session at 1.2970. The pair depreciated as Brexit concerns grew when UK government reconfirmed that the news regarding UK and EU achieving an agreement by this year to be false. Both pound and euro undergone large sell-off as investors risk appetite shift towards dollar.
Market Review (Commodities): November 5 – November 9
GOLD
Gold price depreciated throughout last week, reaching a month low at $1209.60 per troy ounce as the demand for safe haven asset drastically decreases. The yellow metal fell last Friday amid hawkish Interest Rate Statement and bullish PPI data.
Overall, the safe-haven assets such as Japanese Yen and gold was largely sold-off as risk appetite for dollar increases, supported by positive data and hawkish comments from FOMC.
Crude Oil
The price of crude oil was falling throughout the week amid worsening sentiment from its data, closing last Friday’s session at $59.80 per barrel.
The crude oil market underwent a large sell-off when both the American Petroleum Institute (API) and Energy Information Administration (EIA) indicated growing inventories on a global scale, worsening inventor’s confidence towards the oil market as higher supplies will lead to lower price. Saturday’s Oil Rig Count data also indicated increased drilling activity, further boosting the global oil supply level.
Overall, the crude oil market remains cloudy while investors awaits Wednesday Crude Oil Inventories data to further determine crude oil price.
Weekly Outlook: November 12 – 16
For the week ahead, investors will focus on various data such as CPI from US, UK and European market which is a major indicator for a country’s inflation level.
As for oil traders, they will be eyeing on US inventories level reported by API and EIA to gauge the strength of crude demand for world’s largest oil consumer.
Highlighted economy data and events for the week: November 12 – 16
| Monday, November 12 |
Data N/A Events N/A
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| Tuesday, November 13 |
Data EUR – German CPI (MoM) (Oct) GBP – Average Earnings Index + Bonus (Sep) GBP – Claimant Count Change (Oct) EUR – German ZEW Economic Sentiment (Nov)
Events USD – FOMC Member Daly Speaks USD – FOMC Member Brainard Speaks CrudeOIL – OPEC Monthly Report |
| Wednesday, November 14 |
Data JPY – GDP (QoQ) (Q3) CNY – Industrial Production (YoY) (Oct) EUR – German GDP (QoQ) (Q3) GBP – CPI (YoY) (Oct) USD – Core CPI (MoM) (Oct) CrudeOIL – Crude Oil Inventories
Events USD – FOMC Member Daly Speaks USD – FOMC Member Quarles Speaks
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| Thursday, November 15 |
Data CrudeOIL – API Weekly Crude Oil Stock AUD – Employment Change (Oct) GBP – Retails Sales (MoM) (Oct) USD – Core Retail Sales (MoM) (Oct) USD – Retail Sales (MoM) (Oct) USD – Philadelphia Fed Manufacturing Index (Nov)
Events USD – Fed Chair Powell Speaks
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Friday, November 2
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Data CrudeOIL – Crude Oil Inventories EUR – CPI (YoY) (Oct)
Events USD – Fed Chair Powell Speaks EUR – ECB President Draghi Speaks GBP – Inflation Report Hearings
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